Abstract

This paper provides a review of the arguments for and against "cash transfers" in India. It begins by identifying changes in the Indian family and household as providing the context for a discussion on increased economic vulnerability, inequality and social protection reforms in the country. It then considers the principles by which any social policy be judged and briefly reviews the arguments on the two main types of policy on poverty in India. The paper goes on to discuss cash transfers alongside other instruments of social policy such as the Public Distribution System (PDS) and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). It then explores a typology of cash transfers and examines the principal hypotheses associated with the arguments for and against transfers as a social policy instrument. These debates draw upon international experiences and are also explored in the context of corruption, financing and the role of cash transfers in the aftermath of ecological, social or economic shocks. The paper concludes with a discussion on the viability of cash transfers in enabling choice and in changing individual attitudes and behaviour, especially with regard to demand for quality public services.